HI there and welcome
I wont waste your time but your hard disk failed. You would choose option 2, thats all you can as then it boots from your hard disk.
When it starts, it would already do this automatically, but as its not detecting it, it takes you to this menu, and as you see, trying to force it to load the hard disk (option 2) it will not load it.
I am really sorry about this and you are going to have to return the computer to have this replaced. It will be covered by the warranty if this has not expired, and the replacement will be done at no cost to you.
I am really sorry about this, and if you have problems, or would like any additional information or assistance, please do not hesitate to let me know.
And if you can take a second to rate my service by clicking one of the stars at the top of the page, then submit, that would be greatly appreciated.